Contract Expiration

Expiration is the date and time by which a prediction market contract must resolve. If the event has not occurred by expiration, the contract settles to $0 for Yes holders and $1 for No holders.

How Expiration Works

Every prediction market contract has an expiration date. This is the deadline for the event to occur. After expiration:

If the event happened: Yes = $1.00, No = $0.00
If the event didn't happen: Yes = $0.00, No = $1.00

Expiration Types

Fixed date: The contract expires on a specific date regardless of what happens. Example: "Will there be a government shutdown before July 1, 2026?" expires on July 1.

Touch/trigger: Some contracts expire early if the condition is met. Example: "Will Bitcoin exceed $200K at any point in 2026?" settles to $1.00 immediately upon touching $200K.

Rolling: Some markets have daily, weekly, or monthly contracts that roll over. Kalshi's weather markets often have daily contracts.

Time Value and Decay

A contract far from expiration has more "time value" — more time for the event to happen. As expiration approaches:

Contracts near 50 cents tend to stay volatile
Contracts near 0 or 100 cents tend to become more certain
The rate of time decay accelerates in the final days

Strategy Implications

Long-dated contracts give your thesis more time to play out but tie up capital longer. Short-dated contracts are more capital-efficient but require precise timing. The sf strategies command lets you set expiration-aware entry conditions.

Example

Contract: KXFEDRATE-26JUN "Will Fed cut by 25bp+ at June FOMC?"
Expiration: June 18, 2026 (FOMC meeting date)

Current date: March 2026
Days to expiration: ~90 days
Current price: $0.38

Same contract with 7 days left:
  If strong employment data released → price drops to $0.12
  If CPI surprise lower → price jumps to $0.65

Time value compresses — prices move more violently near expiration.

Related Terms

Binary Contract

A binary contract is a financial instrument that pays out a fixed amount (typically $1) if a specified condition is met, and nothing otherwise. Prediction markets are built on binary contracts.

Settlement

Settlement is the process by which a prediction market contract is resolved to its final value — either $1.00 (Yes) or $0.00 (No) — once the outcome of the underlying event is determined.

Resolution Criteria

Resolution criteria are the specific, pre-defined rules that determine how a prediction market contract settles. They specify the data source, measurement method, and exact conditions for a Yes or No outcome.

Event Contract

An event contract is a type of binary contract tied to a specific real-world event with a defined resolution date. Unlike perpetual financial instruments, event contracts have a built-in expiration.

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